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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Lucretius who wrote (12390)	2/22/1998 11:28:00 AM
From: Big Dog	Read Replies (2) \| Respond to of 95453

Here, assembled in this hall, is collected a wide variety of talented and experienced folks. Who knows, one of you might even know someone that knows someone that has a spare $75 million and would like to participate in offshore oil. If not, maybe you will still find this interesting reading. Example of one project now available from the King of Canine (others are available): Rig now working SE Asia area at a daily rate of approx. USD 90k/day to Feb. '99 firm. Currently being bid, and will likely soon obtain work at about USD 110k/day. Owners want to cash out equity in rig to invest in E&P activities, but they want to remain as managers/operators of the rig. Rig has undergone a $25 million, 9 month upgrade recently and is in excellent condition. Engineering has been accomplished to take the rig to deepwater capacity (5000-plus feet). Cost of upgrade approx. USD 100 million and 12 months. Rig would only be off contract for 5 months of those 12 months. Day rate obtainable after upgrade, approx. USD 200,000/day. No need to perform upgrade unless/until deepwater contract is obtained. Rough numbers: Four years @ USD 100,000/day = USD 144 million gross Take away roughly USD 40,000/day for operating costs = USD 58.4 million. Net positive cash flow = USD 85.6 million. Purchase price of rig -- USD 75 million Residual value of rig after four years could be higher or lower than the purchase price. Deepwater projects are very long lead time operations and as such are not subject to the volatility of smaller, shallow water projects. If there is an interest based on the above numbers, I can provide details to serious parties.

To: Lucretius who wrote (12390)	2/22/1998 11:30:00 AM
From: Captain James T. Kirk	Read Replies (2) \| Respond to of 95453

They may be, but NEGOTIATIONS in this sector are starting to FLY !! What do I mean ? Since the sector has been driven down, in many cases well below reasonable value, there are companies meeting to discuss a strategic solution. My latest information is that the may be a consolidation of 3 companies. These companies are looking to develop a business model to capitalize on the predicted oil price increase by mid year. Also, the new major player, is looking to be diversified in its capabilities. Its funny how Harold mentioned UTI. They are instituting a 10 Mil dollar stock buy back program, and the devergance has kicked into high gear. I suspect that they may be one of the companies involved, and they would fit perfectly into having a deversified consolidation.